China's Quest for Energy; Impact Upon Foreign and Security Policy
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FOI--1371--SE November 2004 FOI ISSN 1650-1942 SWEDISH DEFENCE RESEARCH AGENCY User report Ingolf Kiesow China’s Quest for Energy; Impact upon Foreign and Security Policy Defence Analysis SE-172 90 Stockholm FOI-R--1371--SE November 2004 ISSN 1650-1942 User report Ingolf Kiesow China's Quest for Energy; Impact upon Foreign and Security Policy Defence Analysis SE-172 90 Stockholm SWEDISH DEFENCE RESEARCH AGENCY FOI-R--1371--SE Defence Analysis November 2004 SE-172 90 Stockholm ISSN 1650-1942 User report Ingolf Kiesow China's Quest for Energy: Impact upon Foreign and Security Policy Issuing organization Report number, ISRN Report type FOI – Swedish Defence Research Agency FOI-R--1371--SE User report Defence Analysis Research area code SE-172 90 Stockholm 1. Security, safety and vulnerability Month year Project no. November 2004 A 1104 Sub area code 11 Policy Support to the Government (Defence) Sub area code 2 Author/s (editor/s) Project manager Ingolf Kiesow Approved by Sponsoring agency Scientifically and technically responsible Report title China's Quest for Energy; Impact upon Foreign and Security Policy Abstract (not more than 200 words) Contrary to Chinese intentions, the proportion of China’s imports coming from potentially unstable countries is steadily increasing. As a response, China tries to diversify its sources of import and to own the oil when loaded in an export harbour. In spite of very high costs and political problems, China tries to import oil and gas from owned fields in Central Asia through pipelines. In the case of China, the competition is evident on the highest international level. Especially with Japan, this tends to make already previously sensitive relations deteriorate. China has territorial disputes with several neighbouring countries that are becoming more complicated by the fact that there is oil and gas on the bottom of the sea in the disputed area. Relations with Russia have been complicated. Since the 1990s they are on their way of being steadily improved, but they become strained, when Japan is given priority access to oilfields in Siberia. The sensitive relations with the U.S. tend to be impaired by China’s ways of getting access to more secure supply of oil and gas. Chinese efforts to get a more attractive foreign policy profile is on the other hand alleviating but does not eliminate the potential of the energy issue to complicate China’s foreign and security policy relations. The European Union seems to be on its way to introduce energy questions as a field of common policy. This is a reason for Sweden to study the development. It is a matter of special interest that China has proposed an “Energy Dialogue between Asia and Europe” about the resources on the Eurasian continent. The Chinese example illustrates the need for a Swedish energy security policy and plans for energy crisis preparedness. Keywords energy, security, supply, oil, gas, pipeline, exploration, contract, cooperation, territorial border Further bibliographic information Language English ISSN 1650-1942 Pages 66 p. Price acc. to pricelist 2 Utgivare Rapportnummer, ISRNKlassificering Totalförsvarets Forskningsinstitut - FOI FOI-R--1371--SE Användarrapport Försvarsanalys Forskningsområde 172 90 Stockholm 1. Analys av säkerhet och sårbarhet Månad, år Projektnummer November 2004 A 1104 Delområde 11 Försvarsforskning för regeringens behov Delområde 2 Författare/redaktör Projektledare Ingolf Kiesow Ingolf Kiesow Godkänd av Maria Hedvall Uppdragsgivare/kundbeteckning Försvarsdepartementet Tekniskt och/eller vetenskapligt ansvarig Rapportens titel (i översättning) Kinas jakt på energi; inverkan på utrikes-och säkerhetspolitik Sammanfattning (högst 200 ord) Tvärt emot Kinas avsikter har beroendet av mindre stabila länder som leverantörer av olja och gas ökat kraftigt. I gengäld försöker Kina diversifiera sina importkällor och äga oljan redan vid utskeppningen från exporthamn. Trots myckert höga kostnader och politiska problem försöker Kina importera olja och gas från ägda fält i Centralasien via pipelines. Konkurrensen om olja tar sig för Kinas del uttryck på högsta mellanstatliga nivå. Särskilt med Japan tenderar detta att försämra redan förut känsliga relationer. Med flera grannländer har Kina territorialgränsproblem, som förvärras av att det finns olja eller gas på havsbottnen i området. Förbindelserna med Ryssland, som har varit komplicerade men också sedan 90-talet varit på väg att förbättras stadigt, ansträngs av att Japan får företräde till oljefält i Sibirien. Med USA. tenderar de känsliga förbindelserna att försämras av Kinas sätt att skaffa sig säkrare tillgång till olja och gas. Kinas ansträngningar att få en mera tilltalande utrikespolitisk profil mildrar å andra sidan, men eliminerar inte, energifrågans potential att trassla till Kinas utrikespolitiska och säkerhetspolitiska relationer. EU ser ut att införa energifrågor som ett område för gemensam politik. Det gör att Sverige har anledning att studera utvecklingen. Av särskilt intresse är att Kina har föreslagit en ”energidialog mellan Asien och Europa” om tillgångarna på den eurasiska kontinenten. Exemplet Kina visar på behovet av en svensk energisäkerhetspolitik och en planering för beredskap inför energikriser. Nyckelord energi, säkerhet, explorering, kontrakt, samarbete, territorialgräns Övriga bibliografiska uppgifter Språk Engelska ISSN 1650-1942 Antal sidor: 66 s. Distribution enligt missiv Pris: Enligt prislista 3 List of contents LIST OF CONTENTS......................................................................................................................................... 1 ACRONYMS AND ABBREVIATIONS.......................................................................................................... 3 EXECUTIVE SUMMARY .................................................................................................................................. 4 INTRODUCTION............................................................................................................................................... 6 THE PROJECT...................................................................................................................................................... 6 Acknowledgement ......................................................................................................................................... 7 The Matter to be Treated ............................................................................................................................... 7 Structure of the Report................................................................................................................................10 Litterature ................................................................................................................................................... 10 Problems...................................................................................................................................................... 11 CHAPTER ONE................................................................................................................................................. 12 CHINA'S MAIN SOURCES OF SUPPLY............................................................................................................... 12 Reasons for “Trying to Own the Oil when Loaded” ................................................................................... 12 Africa and the Middle East.......................................................................................................................... 13 Latin America is Becoming Involved as well............................................................................................... 15 Even North America is being Targetted...................................................................................................... 15 CONCLUSION ................................................................................................................................................... 16 CHAPTER TWO................................................................................................................................................ 17 PIPELINES FROM CENTRAL ASIA ..................................................................................................................... 17 The Central Asian Oil and Gas Context ..................................................................................................... 17 Investments in Kazakhstan ......................................................................................................................... 18 Connecting with Central Asia..................................................................................................................... 20 Limited Amounts......................................................................................................................................... 21 CONCLUSION ................................................................................................................................................... 21 CHAPTER THREE ............................................................................................................................................ 22 COMPETITION WITH NEIGHBOURS.................................................................................................................. 22 Competition and Disputes with Japan ........................................................................................................ 22